Yahoo Music opens up
Having given up on two music initiatives, Yahoo tries a third one today: pulling other websites' music-related offerings into a single, Yahoo-branded home. It's turning each artist-information page into a more comprehensive portal, offering visitors the ability to play and buy songs, view photos and videos, find concerts, buy tickets and listen to webcasts featuring that act. Some of the content comes from the Yahoo family (e.g., the photos are supplied by Flickr), but most is from sites that make their services widely available online (e.g., on-demand songs from Rhapsody, webcasts from Pandora and Last.fm, purchases from Amazon and iTunes). The Rhapsody feature is integrated into the site, so visitors can listen to an artist's songs without leaving the page. This being Rhapsody, however, users are limited to 25 free songs per month.
It's a work in progress, with some major artists still waiting for their makeover as of this writing (The company says it will provide the new, more robust pages for more than 500,000 artists). Yahoo also plans to add more options for the pages over time, enabling people to find, say, ring tones or T-shirts. The next major release will open the system to other developers, so they can offer widgets that users can add to the pages, said Michael Spiegelman, head of Yahoo's music division. The ultimate goal is to let artists push their own offerings -- blogs, photos, concert recordings, you name it -- onto their pages. "What we really want to do," Spiegelman said, "is create multiple opportunities for the artist to interact with that user."
Yahoo has no trouble drawing music fans to its website -- more than 17 million in February, making it the top-ranked music site in Nielsen Online's index (although Nielsen's count doesn't include MySpace's music-related pages, which have a sizeable following). Its problem has been on the revenue side of the equation ...
It recently dropped its personalized webcasts and turned over its popular online radio business to CBS, which is better equipped to sell enough advertisements to cover the cost of royalties. And last year, it punted its not-so-popular subscription-music service to Rhapsody. One advantage for Yahoo to its new approach is that the cost of the services promoted on the artist pages will be borne by someone else. Yahoo, meanwhile, will sell advertisements on the pages and collect affiliate fees for the buyers it drives to partners' online stores.
Spiegelman said the company isn't giving up on creating music-related content. The site will continue to offer some original and exclusive material, typically financed by sponsors with youthful target audiences. But the new artist pages are a better reflection of Yahoo's open-platform strategy, which downplays exclusives in favor of integrating existing services from around the Web.
"We know the universe that's interested in music is highly overlapping," Spiegelman said, arguing that Yahoo's music audience was the same as that at iTunes, Pandora and Amazon. But music services online are highly fragmented, and there's a disconnect between those that promote demand and the ones that fulfill it. Yahoo is trying to close that gap, while also encouraging something of a virtuous cycle within the online music market. "The more people have to read, the more media they can play and the more videos they can consume, the better off we are overall," Spiegelman said, adding that it's in Yahoo's "enlightened self-interest" to drive traffic to others' sites and services and "create a healthy system around music." After all, he said, the more successful artists become, "the more they’ll have to blog about, the more content they’ll create for us, the more users will come to us, and the more time they’ll want to spend on our pages."
That's the theory, at least. But there are plenty of forces, online and off, impeding that kind of positive feedback loop, including an abundance of free (and not necessarily legal) sources of music and competitors with comprehensive and walled-off services. The most significant challenge may be the fragmentation that Speigelman wants to solve. There are many, many entry points to the world of music online, from labels' and artists' websites to music blogs to tastemaking online publishers. Even if Yahoo persuades many of those players to offer their content through Yahoo's platform as well as their own sites, it doesn't mean fans will follow.
-- Jon Healey